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1. Gold has pushed strongly off an early morning low of $1,204…as of 7:00 am Pacific, bullion is up $9 an ounce at $1,216…Silver, trying to avoid an 8th straight weekly decline, has jumped 14 cents to $15.42…Copper is up 2 pennies at $2.78…Nickel, which fell as low as $5.87 this morning, is now up 3 cents at $6.02 while Zinc is 2 cents higher at $1.21…Crude Oil is off 31 cents at $68.65…Russian Oil output rose by 150,000 barrels per day (bpd) in July from a month earlier, to 11.21 million bpd, energy ministry data showed yesterday…output by top exporter Saudi Arabia has also risen recently, to around 11 million bpd, and U.S. production is around that level as well…the U.S. Dollar Index is relatively flat at 95.16 after this morning’s modest miss on the jobs report…after this week’s Fed meeting, market expectations for a rate hike in September are now at 93.6% according to CME Group’s FedWatch tool…
2. U.S. payroll growth turned sluggish in July after 2 robust months, though the unemployment rate edged lower and the overall jobs picture continued to look solid, according to Labor Department numbers released this morning…total non-farm payrolls increased by 157,000 for the month, below the 190,000 expected in a survey of Reuters‘ economists and the lowest gain since March…however, jobs growth for June was revised up by 35,000 to 248,000 from 213,000…the unemployment rate for July fell one-tenth of a percentage point to 3.9%, as expected, and is around its lowest level in nearly half a century…in the key wages category, average hourly earnings also met expectations, increasing 2.7% over the same period a year ago…the Federal Reserve is closely watching the wages component as it seeks to meet its 2% inflation target…
3. China says it will slap levies on $60 billion of U.S. products if Washington moves ahead with its tariff threats against Beijing…in a statement issued late today in China, the State Council, China’s cabinet, said the country is preparing to impose duties at levels of 25%, 20%, 10% and 5% on some 5,207 American goods…“The implementation date of the taxation measures will be subject to the actions of the U.S., and China reserves the right to continue to introduce other countermeasures,” the State Council statement said. “Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties”…the problem for the Chinese is that they export far more to the U.S. than they import…China also moved today to rein in the yuan’s rapid depreciation as investors bid down the tightly controlled currency to its weakest level in more than a year amid growing worries over a trade battle with the Trump administration…meanwhile, White House economic adviser Larry Kudlow warned China this morning, saying Beijing should not underestimate President Trump’s determination to act on trade…
4. Ballooning U.S. deficit and debt – how could this not be good for Gold?…this week’s Treasury Department announcement that it would have to increase the amount of bond auctions over the next 3 months was a gentle reminder that the government IOU is only getting bigger and will start influencing interest rates sooner rather than later…as more product comes to market, investors could be expected to demand higher yields to snap up all the supply…and those higher yields mean higher costs at a time when U.S. taxpayers already have shelled out nearly half a trillion dollars this year in debt service…total U.S. debt just passed the $21.3 trillion mark, of which $15.6 trillion is owed by the public…“We’re applauding strong growth – yet have no choice but to borrow the largest amount of money since the financial crisis a decade ago,” stated Bernard Baumohl, chief global economist at The Economic Outlook Group…“And that’s just the start, the U.S. will be running trillion dollar deficits as far as the eye can see”…booming economic growth has so far not been sufficient to lower the budget deficit – in fact, the deficit and Treasury borrowing are headed sharply higher, and virtually no one in Washington seems to care…indeed, the Congressional Budget Office projects the deficit to be just a shade under $1 trillion in 2019 and then pass that level in 2020 and eclipse $1.5 trillion by 2028…the cost to finance all that debt has continued to grow, hitting $458 billion in fiscal 2017 and already at $415 billion in 2018 with 3 months left in the fiscal year…revenue receipts, meanwhile, are lagging…tax and withholding payments from individuals and corporations have come in at $1.752 trillion in calendar 2018, about $17 billion below the same point in 2017, a difference of about 1%, according to DataTrek Research…that’s also below the 0.2% gain in revenue the government had projected…
5. The Dow is up 33 points through the first 30 minutes of trading…global equities have risen 2.8% year-to-date, though Bank of America Merrill Lynch strategists calculate that without U.S. tech, they would be 0.8% in the red…in Toronto, the TSX is down 23 points…Canadian Natural Resources (CVE, TSX) says it’s preparing to expand its biggest Oil sands project, increasing its capital spending plans for the remainder of 2018 by $170 million to bring its total for the year to $4.6 billion…the move is a contrast to the stated intentions of competitors Cenovus Energy and Suncor Energy which have indicated they would not sanction new projects in the Oil sands until new export pipelines are under construction or until Canadian regulators reduce the costs and onerous burdens on energy companies…the Venture is flat at 701 through the first 30 minutes of trading…the early volume leader remains Sokoman Iron (SIC, TSX-V) which has enjoyed an impressive week after news that Eric Sprott is taking down much of the company’s $3 million financing…SIC has been a 5-bagger since BMR’s July 18 piece, “A Cheapie Gold Play That’s A Walking Time Bomb“…
6. Torino Power Solutions (TPS, CSE) has further enhanced various performance characteristics of its Power Line Monitoring sensor system…the company announced this morning that its senior engineer helped complete the latest rounds of testing at SICAME’s laboratory in Dervaux, France, in July…SICAME, a world leader in the manufacturing of components, equipment and services for transmission and distribution electrical networks, signed an MOU with Torino last month…the PLM sensor design has been optimized to allow for even more accurate readings while further enhancing overall robustness; Torino engineers have produced a considerably lower cost radome, an ABS shell used to protect and insulate the sensor; and software engineers have developed a new control server for the Interrogator (communications box placed on poles and towers) that manages multiple interrogators under one platform, creating faster performance and maximum flexibility for installation of multiple sensors…CEO Rav Mlait stated, “We are pleased with the pace of improved design and performance of our PLM sensors. Torino’s senior engineer has recently returned from France where work on the latest rounds of testing and evaluation was taking place. We believe our efforts to continuously improve our power line sensor solution will attract new clients and opportunities for Torino at a time when utilities globally are investing in new technology to improve grid performance”…TPS, clearly at the beginning of a new uptrend, has added 2 pennies to 15 cents as of 7:00 am Pacific…
7. Short sellers taking aim at Tesla (TSLA, NASDAQ) are holding onto bets that the electric car maker is on borrowed time, undeterred by the stock’s biggest 1-day rally in years…heading into the electric car maker’s earnings report Wednesday, investors who had placed wagers on Tesla shares falling had racked up about $10.5 billion in short interest – making Tesla the most shorted stock in the U.S. on a dollar basis, according to financial-analytics firm S3 Partners…those bets turned into a $1.7 billion loss yesterday after Tesla’s results showed it burned through less cash than investors expected…the stock jumped 16% to $349.54, its biggest 1-day gain since 2013 and wiping out all of the short sellers’ profits for the year…betting against Tesla has long been a volatile and money-losing trade, with the company’s shares up more than 1,900% from its 2010 IPO price of $17…
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